SA Software Pirate found Guilty

A rogue computer reseller who sold pirated software to unwitting consumers in Port Elizabeth and Johannesburg has been handed a suspended prison sentence and ordered to pay compensation to his victims.

Computer shop manager Vikesh Singh, who traded as PE Technologies in Port Elizabeth and later as Vision Technologies in Johannesburg, was found guilty in the Specialised Commercial Crime Court in Port Elizabeth on June 15 of fraud and multiple contraventions of the Counterfeit Goods and Copyright Acts for selling counterfeit and unlicensed copies of Microsoft software.

Singh also pleaded guilty for contravening the Companies and the Close Corporations Acts by acting as a manager while disqualified, as he had previously been convicted of theft.

He was sentenced to six years‘ imprisonment, suspended for five years, provided he doesn‘t contravene the Counterfeit Goods Act or the Copyright Act. He was also sentenced to a fine of R80 000, or four years‘ imprisonment conditionally suspended for five years, for contravening the Companies Act and the Close Corporations Act. Singh was also ordered to compensate four customers, who had been sold counterfeit Microsoft software and acted as witnesses in the criminal case, three times the value of their purchases, and ordered by the court to pay compensation to Microsoft of R150 000.

Dale Waterman, Microsoft‘s Corporate Attorney for Anti-Piracy for the Middle East and Africa, said every year, thousands of South African consumers and businesses are affected by counterfeit software which they have acquired unwittingly.

“œConsumers are coming to us daily with complaints about counterfeit software. And they want industry and government to stand up and take action. Our commitment is to do everything we can to help our customers and protect our legitimate partners,“ said Waterman.

“œSoftware counterfeiting negatively impacts the entire IT ecosystem. Legitimate partners and resellers must compete with software pirates and unscrupulous businesses selling counterfeit software, making it very difficult for them to compete on a level playing field. They also lose sales and the opportunity to service those customers. This is why we pursued this investigation to a conclusion, even though it took 4 years.“

The effects of pirated software can have a devastating impact on the livelihoods of consumers, says Waterman. Counterfeit software can contain dangerous viruses, spyware and other malware that can actually harm consumers through identity theft, loss of data, system failures and opening the door to online spam, virus and fraud networks.

One of Singh‘s victims said he had lost personal data after a system malfunction caused by the counterfeit software.

“œI bought Microsoft Office 2007 from PE Technologies in Port Elizabeth in 2008. It was a packaged like a genuine product with what I thought was a genuine hologram CD and a certificate of authenticity, but I started getting messages to say that the product was not genuine. I then approached Microsoft for assistance after Vikesh Singh refused to replace the product with genuine software,“ said the customer, who asked to remain anonymous.

The case followed an SAPS Commercial Crime Unit raid on PE Technologies in Newton Park in August 2008 after a two-year investigation by Microsoft, including undercover test purchases. Microsoft had received several complaints from local consumers and legitimate computer shops in the region. During the raid the SAPS seized a large quantity of fake Microsoft software, packaged to look like genuine products, and being sold to unsuspecting customers as the genuine article.

A further SAPS raid in April 2009 followed after another undercover Microsoft test purchase confirmed that PE Technologies in Port Elizabeth were still engaged in what is referred to as “œHard Disc Loading“, a term used when a PC shop or reseller installs a copy of Microsoft software onto a computer, but fails to distribute the authorized package of genuine Microsoft software components.

Investigations also confirmed that PE Technologies in Port Elizabeth had been using a stolen Volume Licence Key belonging to another legitimate customer to install pirated copies of the Microsoft Office suite, and that Vision Technologies in Johannesburg had then subsequently been engaged in the practice of Hard Disc Loading.

Marius Haman, Head of Anti-Counterfeiting at Bowman Gilfillan Attorneys, said increasing partnerships between the public and private sector is crucial to the success of combating software piracy and counterfeiting in general in South Africa.

“œThe government, through law enforcement channels like the SAPS Commercial Crime Unit and the Specialised Commercial Crime Court, can lead by example and be one of the most effective mechanisms for sending a strong and clear message that the government will not tolerate counterfeiting and piracy in South Africa,“ he said.

Microsoft SA
withdraws R600 000 civil suit against Vikesh Singh and Vision
Technologies.Â A spokesperson for Vision
Technologies announced today that Microsoft SA had placed a press release on
many internet sites informing the public that the Port Elizabeth Commercial
Crime Court had successfully convicted Vikesh Singh on several charges
including the unlawful distribution of pirated Microsoft Software and hard disk
loading, etc.Â Mr Waterman, Microsoftâ€™s
lawyer for the Middle East and Africa, in his statement to the public fails to
mention all the facts in the matter.Â It
is unethical for an officer of the High Court of South Africa to have given a
one-sided version of the facts which favours his employers, Microsoft, and has
caused major collateral damage to Vision Technologies.Â Waterman fails to state that Vision
Technologies spent R1.3m with Microsoft SA last year.Â Secondly, Waterman fails to state that
Microsoft had withdrawn a civil action against Vision Technologies for
R600Â 000.00.Â Why would they do
that?Â The only reason to be inferred
from this is that they did not have such a cause of action against Vision
Technologies and would have failed to succeed with their civil action in the
Port Elizabeth High Court with regards to the action that was withdrawn by
Microsoft.Â Vision Technologies had spent
a substantial amount of money in legal fees to defend this civil action.Â Vision Technologies intends recovering this
amount of money in a civil action against Microsoft.Â Thirdly, Waterman does not state that Vikesh
Singh had provided copies of the Microsoft products he intended to import, to
SARS Customs Division to enquire whether the products were genuine or
counterfeit.Â SARS Forensic Unit had
informed Vikesh Singh that they would send the Microsoft products that he had
provided to them, for expert advice. Â After it was tested, SARS Forensic Unit
approved the Microsoft products to be imported.Â
Upon receiving the said advice from SARS Forensic Unit, Singh imported
150 units of the Microsoft Software.Â
When the units arrived SARS withheld copies (samples) in order to have
these products tested again.Â Only once
SARS had approved the software was it released to Singh.Â What more can a reasonable man do to
determine whether the software was legitimate or not?Â Furthermore Microsoft seized 148 of the
units.Â The loss to Microsoft was
negligible given the fact that Singh had purchased software to the value of
R1.3m last year.Â In terms of Microsoftâ€™s
press release or Watermanâ€™s statement it seems as if Microsoft operated a
squeaky clean investigation when they were covered in dirt because they never
checked out all the other computer stores in Port Elizabeth which are commonly
known to be doing hard disk loading.Â
Microsoft decided to focus on Vision Technologies only.Â Waterman as a lawyer should understand that
the investigation into Vision Technologies was discriminatory in nature.Â Vision Technologies is busy taking legal
advice about launching an application for discrimination in the Equality Court
for loss of future income against Microsoft andÂ
Dale Waterman in his personal capacity.Â
The collateral damage caused by Watermanâ€™s statement has led to
suppliers of Vision Technologies terminating business relations with Vision
Technologies and causing a huge loss to Vision Technologies.Â These actions of the various suppliers are
unconstitutional and will be referred to the Competitions Board imminently.Â Furthermore, Microsoft via Watermanâ€™s
statement is an attack on Vikesh Singhâ€™s dignity.Â This has already been referred to the Human
Rights Commission.Â The decision by
Vikesh Singh to enter into a plea bargain was purely a business decision.Â Should he have pleaded not guilty, the trial
would have run for two years and would have meant Singh would have spent more
time in court that at his place of work and in addition to this, the legal
costs would have been exorbitant.Â This
would have bankrupted Singh.Â It must be
pointed out that Singh never stole a licence key for Microsoft 2003.Â This key is freely available on the net.Â